Can consumption take another step forward? Where is the new retail track?

The Ministry of Commerce has positioned 2023 as a “consumption boost year”. To boost consumption, retail sales must be boosted. So what is the situation in the retail industry?

Economic data released by the National Bureau of Statistics show that from January to November 2023, the total retail sales of consumer goods was 42.79 trillion yuan, a year-on-year increase of 7.2%, 0.3 percentage points faster than the January to October period. National online retail sales reached 13.95 trillion yuan, a year-on-year increase of 11.0%. Among them, online retail sales of physical goods were 11.77 trillion yuan, an increase of 8.3%, accounting for 27.5% of the total retail sales of consumer goods.

From Beijing's perspective, since this year, Chaowai Commercial District, Jingxi Commercial District, Xisanqi Mixc, Jingxi Joy City, Wukesong, Wanda and many other projects have entered the market one after another. Traditional projects have been updated at an accelerated pace, and Chaowai has young talents. Center Saite has opened, Xidan Shopping Mall and Contemporary Mall have entered the period of adjustment and reorganization, and the first stores are constantly emerging, creating a variety of consumer experiences.

Fu Yuehong, president of the Beijing Federation of Commerce, said that the recently completed Beijing commercial retail service quality market research report showed that consumer satisfaction reached 84%, an increase of 4 percentage points from last year. She believes that innovation can help Beijing’s business continue to grow, services can improve the quality of Beijing’s business, and integration can help enrich Beijing’s business. Beijing’s commercial and retail industry will surely reach a new level.

At present, China's retail industry is in a transitional stage between the old and the new eras. That is, the era of chasing the quantity of standard products is gradually passing, and focusing on high-quality "hot products" is becoming a new trend. In the past, hypermarkets competed based on the quantity of standard products and sought to allow consumers to purchase them all in one stop. Nowadays, consumers almost all order these standard products online. How can the retail industry adapt to the demand for consumption upgrades, turn to consumer goods with higher customer gathering capabilities, create high-quality "hot products", and provide high-quality and unique consumer experiences? The direction of change in the retail industry.

At the same time, with the support of the Internet, big data, artificial intelligence and the logistics industry, China's e-commerce platform has developed, and its e-commerce penetration rate far exceeds that of developed countries such as the United States, France, Germany, and Japan. The rapid pace of digitalization has deeply affected all aspects of the retail industry. Consumer shopping habits and consumption concepts have already undergone tremendous changes, and new retail business models are being built.

So, can consumption take another step forward? Can there be new developments in the retail industry?

Consumption is based on demand. The "2023 Hurun China New Retail White Paper" released on the 18th showed that from a survey data from the Hurun Research Institute, 41% of the respondents said that consumer demand is still there and has not shrunk, but the consumption structure will Adjustments are made according to changes in demand, reflecting quality upgrades and a rational consumption attitude. 59% of respondents said they would increase total annual household consumption in the next year, which is an increase of 2.6 percentage points from 2022.

In terms of consumption structure, tourism enthusiasm is rising. Nearly 50% of the respondents said that they plan to increase their consumption more in tourism in the next year, followed by health care and high-tech electronic products. Among them, Generation X has the strongest willingness to consume and upgrade “health care”.

The survey pointed out that the explosion of instant consumption demand has promoted the vigorous development of instant retail. 78% of the respondents said that instant retail highly meets the consumer demand for immediacy and convenience, and can improve the shopping experience and meet consumption upgrades.

Instant retail refers to consumption where consumers place orders on online platforms and offline physical retailers provide door-to-door services through logistics and delivery. The products provided include food and beverages, fresh fruits and vegetables, snacks, digital 3C, beauty and personal care, and even alcoholic beverages. Meat, eggs, poultry, milk, etc. have shown a consumption trend of "all things at home".

Judging from the time period of consumption on the instant retail platform, afternoon tea is the most consumed time period. Afternoon tea has changed from a social way to a way to enjoy life. In addition, 77% of the respondents said they would increase shopping on instant retail platforms in the future. This provides broad space and motivation for the future development of the instant retail industry.

The China Chain Store and Franchise Association predicts that by 2024, the market size related to instant retail will exceed 1 trillion yuan.

The consumer field is an important scenario for the application of the Metaverse. The boundary between virtual and reality is broken, bringing more new products, new scenarios and new experiences, and also bringing major changes and greater development opportunities to the consumer industry. Survey data shows that 79% of the respondents said that the Metaverse allows them to understand and grow more innovative quality products, 77% of the respondents said that the Metaverse allows them to be happy to share their consumption experiences, and 76% Respondents said that different scenes in the metaverse bring them more interesting shopping experiences.

"Artificial intelligence, VR/XR, cloud computing platform, digital logistics, and flexible supply chain, these five technologies are focusing on consumers to create a beautiful retail scene in the future." China's New Retail "White Paper" judged this way.

“The retail industry is the fourth largest industry disrupted by global unicorn companies. After financial services, enterprise management solutions, and medical health, the retail industry has been disrupted the most, with e-commerce as the main industry. In the Internet, big data, and artificial intelligence, the retail industry has been disrupted the most. Driven by technologies such as intelligence, the retail industry has begun to transform from traditional models to digital and intelligent ones. " Hurun Report, Chairman and Chief Research Officer, believes that the biggest breakthrough in the near future may be in cross-border e-commerce new retail, including e-commerce. Duoduo's cross-border platform Temu and fast fashion cross-border e-commerce Shein have achieved rapid development through Internet retail international express delivery with comprehensive supply chain digitization.

He said that in the context of the digital economy, new retail business models have become an inevitable trend in the development of the retail industry. The new retail model is empowering the entire industry chain, profoundly affecting and significantly improving retail efficiency, thereby helping the retail industry achieve high-quality development.